In a sign of the growing economic toll from the coronavirus pandemic, total housing starts decreased 30.2 percent in April to a seasonally adjusted annual rate of 891,000 units, according to a report from the U.S. Housing and Urban Development and Commerce Department.
The April reading of 891,000 starts is the number of housing units builders would begin if they kept this pace for the next 12 months. Within this overall number, single-family starts decreased 25.4 percent to a 650,000 seasonally adjusted annual rate. This is the lowest single-family starts rate since the first quarter of 2015. The multifamily sector, which includes apartment buildings and condos, decreased 40.5 percent to a 241,000 pace.
“Despite today’s numbers, there is an undercurrent of long-term positivity in the housing market that will likely allow for a strong rebound,” said Dean Mon, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Shrewsbury, N.J. “Our builder confidence index has already shown signs of a turnaround. Housing was showing signs of momentum before the pandemic and is poised to lead the economic recovery as virus mitigation efforts take hold and more states take gradual steps to reopen.”
“While the April numbers were down, they were somewhat better than forecast and are expected to improve as more of the economy reopens,” said NAHB Chief Economist Robert Dietz. “Single-family weakness was particularly seen in the West and Northeast as larger metro areas were under more economic pressure due to the lockdown phase. But as a sign of the strength housing had going into this downturn, single-family starts are still 1.0 percent higher on a year-to-date basis.”
On a regional and year-to-date basis (January through April of 2020 compared to that same timeframe a year ago), combined single-family and multifamily starts are 6.8 percent higher in the Midwest, 9.0 percent higher in the South, 7.7 percent higher in the West and 1.3 percent lower in the Northeast.
Overall permits declined 20.8 percent to a 1.07 million unit annualized rate in April. Single-family permits decreased 24.3 percent to a 669,000 unit rate, while multifamily permits decreased 14.2 percent to a 405,000 pace.
Looking at regional permit data on a year-to-date basis, permits are 7.1 percent higher in the South and 4.1 percent higher in the West. Meanwhile, permits are 8.0 percent lower in the Northeast and 3.1 percent lower in the Midwest.
Tags: COVID-19, National Association of Home Builders